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BANKS POST RECORD
$42.2B IN PROFITS
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FDIC-insured banks earned a record
$42.2 billion in the second quarter of this year,
up 22.6 percent, or $7.8 billion, from $34.4
billion a year ago. The increase marks the 16th
consecutive quarter earnings rose year-overyear.
The FDIC credited a rise in noninterest
income, lower noninterest expenses, and
reduced loan loss expenses as the main
driving forces behind the significant annual
improvement. Overall, 53.8 percent of the
nearly 7,000 insured banks posted annual
earnings increases.
As profits rose, the FDIC's list of problem
banks contracted to 533 compared to 612 a
year ago. The tally for problem banks is down
significantly from its record high of 888.
Assets at problem banks declined to $192.5
billion in the second quarter from $213.3 billion
a year earlier.
Banks failed at a much slower rate this year.
Twenty bank failures have been reported so far
this year compared to 40 closings during the
same period in 2012.
The FDIC report also showed reserves for
loan losses were down on a quarterly basis for
the 13th straight quarter. In Q2, total reserves
decreased $6.4 billion, or 4.1 percent. Banks
charged off $14.2 billion in uncollectible debt in
the second quarter, down 30.7 percent from a
year earlier.
Loan balances overall rose by $73.8 billion,
or 1.8 percent, with commercial and industrial
loan balances up by $30.4 billion, or 2 percent.
Loan balances for one-to-four unit residential
properties, however, decreased $22.1 billion, or
1.2 percent, while home equity loans fell by $9.8
billion, or 1.8 percent.
The balance of past due first-lien mortgages
fell $13.3 billion, or 8.2 percent, while unpaid
real estate construction and land loans dropped
$2.8 billion, or 19.1 percent.
The FDIC's report also found banks
employed 2,097,292 full-time workers in the
second quarter, down 5,544 from the first
quarter, and down 10,900 from Q2 2012.
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